Prabhudas Lilladher's research report on Mahanagar Gas
Future growth for MGL is poised to be driven by GA3, where penetration remains significantly lower compared to the more established GA1 and GA2. Robust performance in the industrial segment would further support its growth trajectory. However, margins could taper off given the falling domestic gas allocation, while the possibility of fuel price cuts could impact its competitive positioning.
Outlook
Thus, we build in a volume of 6% CAGR over FY24-27E to 4.3mmscmd. EBITDA/scm is estimated at Rs10.5 for FY25E, and Rs10/10 for FY26/27E. Upgrade rating from ‘SELL’ to ‘HOLD’ with a TP of Rs1,864 based on 18x avg FY26/27EPS.
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